Echelon Announces Networked Energy Services Project with Dutch Grid Operator Continuon

LonWorld Exhibition
SAN JOSE, Calif.--()--July 14, 2003--Echelon Corporation (Nasdaq:ELON), the creator of the LonWorks(R) device networking platform for networking everyday devices to each other and the Internet, announced today that it is working with Continuon Netbeheer, a leading Dutch utility grid operator and subsidiary of the Dutch utility Nuon, to examine the deployment of Echelon's Networked Energy Services (NES) system within Continuon's service territory. Echelon's NES system is a low cost, standards-based device networking infrastructure embedded within a utility's distribution network that enables a broad set of energy services that can dramatically lower operating costs, improve service quality, and increase customer loyalty and satisfaction. With over 2.7 million electricity customers, Nuon is one of the leading electric utilities in the Netherlands.

"We believe that Echelon's NES system could contribute to our ambition to become one of the leading grid operators in Europe," said Paul Corton, CEO of Continuon Netbeheer. "When the pilot leads to overall implementation, Echelon's NES system will not only be able to improve our efficiency and lower our costs to the benefit of our shareholders, but also improve our quality, reliability, and responsiveness to the benefit of our customers."

The project announced today is an expansion of a small technology trial begun in late 2002. This next phase, pre-deployment pilot, is designed to implement the complete end-to-end infrastructure of a full deployment, with connectivity from intelligent meters through to Continuon's information systems and business processes, but on a limited scale. Planning, implementation, and integration are expected to occur throughout the balance of 2003 with initial meter installations beginning late this year. Assuming that the system performs as expected and that Continuon receives all necessary financial and regulatory approvals, some of which are outside of both parties' direct control, full deployment throughout Continuon's territory would be targeted to begin in early 2005.

"We are very pleased to announce this project," said Ken Oshman, Echelon's chairman and CEO. "While we still have many tasks to accomplish before a full rollout throughout Continuon's territory can begin, we have been working with Continuon for some time now and are confident that the NES system will deliver on its promise of a wide array of services delivered over a single, open, extensible infrastructure that will enable Continuon to cut costs and increase quality in almost all of their operational areas."

By embedding intelligence and communications capability within highly functional smart digital electricity meters, Echelon's NES platform can enable utilities to realize cost savings and revenue enhancements in metering, operations, customer services, and other areas. It enables a comprehensive set of energy services, including two-way automated meter reading; time-of-use & real-time pricing; prepayment without card; remote physical disconnect and reconnect; distribution system asset optimization; outage detection and restoration management; blackout and brownout elimination; comprehensive revenue protection; real-time direct load control, and more.

About Continuon Netbeheer

Continuon Netbeheer is an independent Dutch grid operator and responsible for the management of the power and gas grid of Dutch utility Nuon. The company also takes responsibility for distribution and transport of power and gas to other energy producers or buyers. Continuon Netbeheer is fully owned by Nuon, a leading energy company supplying products and services to almost three million customers both within and outside the Netherlands. Nuon is an acknowledged leader in renewable energy. It aims to achieve balanced growth for all stakeholders: shareholders, employees, customers and for the environment and society as a whole. In 2002, operating revenues totaled EUR 4.7 billion. Nuon employs over 10,000 people. Its principal shareholders are Dutch provinces and local authorities. Further information regarding Nuon can be found at http://www.nuon.com.

About Echelon Corporation

Echelon Corporation is the creator of the LonWorks platform, the world's most widely used standard for connecting everyday devices such as appliances, thermostats, air conditioners, electric meters, and lighting systems to each other and to the Internet. Echelon's hardware and software products enable manufacturers and integrators to create smart devices and systems that lower cost, increase convenience, improve service, and enhance productivity, quality, and safety. Thousands of companies have developed and installed LonWorks products and more than 30 million LonWorks enabled processors have been shipped for use in homes, buildings, factories, trains, and other systems worldwide.

The protocol underlying LonWorks networks and the signaling technology used by Echelon's power line and free topology transceivers have been adopted as standards by the American National Standards Institute (ANSI). Echelon is also a founding member of the LonMark Interoperability Association, an open industry forum of hundreds of leading manufacturers, integrators, and users dedicated to promoting the use of interoperable LonWorks devices. More information is available at http://www.lonmark.org. Further information regarding Echelon can be found at http://www.echelon.com.

Echelon is a sponsor of the LonWorld(R) Exhibition, the world's largest event devoted to the networking of everyday devices, to be held October 15-16th 2003 in Munich, Germany. The show is being organized by TEMA AG. Concurrent with the LonWorld Exhibition, Echelon will hold an international developers' conference. More information on the show and conference can be found at http://www.lonworldexpo.com or http://www.tema.de.

Echelon, LonWorks, LonMark, LonWorld, the LonMark logo, and the Echelon logo are trademarks of Echelon Corporation registered in the United States and other countries. Other marks belong to their respective holders.

This press release may contain statements relating to future plans, events or performance. Such statements may involve risks and uncertainties, including risks that development of the NES system is not successful or does not meet its target dates or cost objectives, the proper operation of the NES system in Continuon's service territory, risks that Continuon may not receive funding or required approvals to move forward with full deployment, may not experience the expected cost savings, revenue enhancement or other economic benefits of the NES system, or may choose not to move forward with full deployment of the NES system for other reasons, the ability of the NES system to function as designed, the timing and level of customer orders, demand for products and services, development of markets for Echelon's products and services, and other risks identified in Echelon's SEC filings. Actual results, effect on earnings, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contacts

Echelon
Steve Nguyen, 408/938-5272
qnguyen@echelon.com
or
McQUERTER
Tina Wilmott, 858/450-0030 x140
twilmott@mcquerter.com

Contacts

Echelon
Steve Nguyen, 408/938-5272
qnguyen@echelon.com
or
McQUERTER
Tina Wilmott, 858/450-0030 x140
twilmott@mcquerter.com